Proliferation of alveolar type II cells is thought to be critical for restoration of gas exchange units after diffuse alveolar damage. However, the factors that regulate type II cell proliferation are not well understood. Hepatocyte growth factor (HGF) is a potentially important mitogen because it causes epithelial cells but not fibroblasts to proliferate and is found in the lung. We used rat alveolar type II cells in primary culture to demonstrate that HGF stimulates DNA synthesis in a concentration-dependent manner. The half maximal effect on stimulation of thymidine incorporation was less than 1 ng/ml. By autoradiography, HGF increased nuclear labeling from 1.3% of type II cells with medium alone to 9.4% with 5 ng/ml HGF. During this time, HGF modestly increased cell number in comparison to control media. However, in an assay of colony formation in low-density cultures, HGF did not consistently increase colony formation by alveolar type II cells and was less effective than acidic fibroblast growth factor or bronchoalveolar lavage fluid in this assay. The receptor for HGF (c-met proto-oncogene) was expressed in rat type II cells and whole lung but not in macrophages. In contrast, the mRNA for HGF was detected in rat macrophages and lung but not in type II cells. However, HGF message was not detected in human alveolar macrophages under conditions in which the HGF message was detected in rat alveolar macrophages and in human fibroblasts. Hence, HGF is a potential paracrine growth factor for alveolar type II cells, but there may be important species differences in the relative level of expression.